Oil prices up despite clear signs of oversupply

Oil prices were up in Asia on Thursday as they rallied from a drop to their lowest levels in 18 years during the previous session. International Brent oil futures slid almost 7%, whilst US Crude Oil WTI Futures fell 1.19% the day before.

Brent oil futures rose 3.21% to $28.58 by 10:25 PM ET (3:25 AM GMT) and Crude Oil WTI futures jumped 2.92% to $20.45.

The International Energy Agency (IAE) warned of a 29 million barrel per day dive in April oil demand in its monthly report, levels not seen in over two decades.

“There is no feasible agreement that could cut supply by enough to offset such near-term demand losses. However, the past week’s achievements are a solid start,” the report added.

In addition, the Energy Information Administration (EIA) said overnight that the US crude oil inventory jumped by 19.2 million barrels for the week ending April 10. In forecasts prepared by Investing.com, analysts had predicted an increase of 11.676 million barrels.

The American Petroleum Institute (API) also estimated a 13.1-million-barrel increase on Tuesday.

Even as oil producers including Saudi Arabia and Russia agreed to production cuts as part of the <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC+ deal reached on April 5, the numbers pointed to an unenviable oversupply as the COVID-19 virus continues to hit demand.

“The slow implementation of the agreement, the risk of non-compliance and no firm commitment from others to follow suit could see the market remain under pressure until the pandemic loosens its grip to let fuel demand recover,” Saxo Bank analyst Ole Hansen told CNBC.